There is a price for borrowing money. Aside from the annual membership fee, one of the most important things that you should consider is the interest. This is how the credit card issuer earns money. Understanding the different credits and debits that go in and out of your credit card statement is one of the skills that you need to be able to use your card wisely. Don’t just swipe, understand how your credit card works.
Many people have the bad habit of not reading their credit card statements. For those who do read, how many really understand what it all means? It is because of this that many people found themselves in credit card debts that have already escalated beyond their control. Don’t be one of these people. Learn how credit card works. Use it to your advantage.
A credit card is a very handy tool. You can make purchases without the hassle of bringing too much cash with you. However, it can also be a very dangerous tool. If you don’t know how to handle your finances, you might end up in tremendous debt later on. So, before you apply for one or another one for that matter, make sure to check out first if having a credit card is good or bad for you.
Parking your money in a regular savings account is never a good idea. Warren Buffet, one of the world’s most successful investor of our time has this to say about investing in cash:
The one thing I will tell you is the worst investment you can have is cash. Everybody is talking about cash being king and all that sort of thing. Cash is going to become worth less over time… Cash is a bad investment over time.”
As you pack your Christmas decorations back in their cabinet, the money that you’ve blown away during the holidays is now finally sinking in. The mere thought of looking into your credit card account balance may even petrify you. If it’s any consolation, you are not alone in your predicament.
Compound interest can either be your best friend or your worst enemy. It all depends on how you use it. You can either gain from it or you can loose a lot because of it. Your life can be much better or much worse than you already have. It’s your choice.
To live beyond your means simply means that you are spending more than what you can afford. Statistics show that a great majority of employees nowadays are living from paycheck to paycheck without any kind of financial cushion. While we all deserve to spend our hard earned income, spending beyond our earnings and racking up debt in the process is a recipe for financial disaster.
To live beyond your means is to spend more than you earn.
Are you constantly worried about money? Are you struggling to meet debt obligations? Do you feel that your salary is not enough to cover your monthly expenses? Are your financial worries so stressful that they are already gravely affecting all aspects of your life including your health and personal relationships?